August 1, 2005

Sideways

"There is no system which can immediately and accurately identify the difference between a short term fluctuation and a big, long-term, profitable trend. From time to time, the trading system enters trends, which despite promising signals, reverse very fast. These erroneous signals may cause losses if they occur cumulatively. In so-called sideways periods, when no clear trends can be identified, erroneous signals occur more often. As hardly any clear trends develop during such sideway movements, it is difficult to yield profits in these periods."